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Shareholders reject activist proposal on shale gas risk reporting

Shareholders at Exxon Mobil and Chevron Corp. voted down proposals from activist investors that would have required reporting on progress on efforts to minimize adverse effects from shale gas drilling and production. The efforts at Exxon Mobil came from a group led by the New York City Pension Funds and the Park Foundation, while the proponents of the Chevron proposal were not identified by the company. The proponents of the measures identified horizontal drilling and hydraulic fracturing technology as a “highly controversial public policy issue” in explaining their motivation for proposing the measures. Approximately 30% of Exxon Mobil shareholders and 31% of Chevron shareholders voted in favor of the nearly identically phrased proposals.

The proposal at the Exxon Mobil meeting would have required the board of directors to “report to shareholders by October 20, 2013, and annually thereafter, using multiple quantitative indicators, the results of company procedures and practices, above and beyond regulatory requirements, to minimize any adverse environmental and community impacts from the company's natural gas operations associated with shale formations. Such reports should be prepared at reasonable cost and omit confidential information.” The proposal at the Chevron meeting omitted the “and annually thereafter” phrase but was otherwise identical.

Exxon Mobil’s board said the company uses its annual Corporate Citizenship Report to discuss the risks and rewards of shale gas extraction. Chevron said it already publishes a substantial amount of information on how it minimizes health and environmental risks.